Devin Stockfish: Yes. I mean I’ll offer the caveat that lumber pricing is very, very hard to predict as we’ve seen over the last several years. I would say, if we look back over the pandemic era, I don’t know that I would necessarily look at $1,000 lumber prices as being something we’re going to see very often. That was a result of just a number of factors coming together at the same time, all of the supply chain disruptions, et cetera. So I’m not sure that’s how you should be thinking about things. As we think about where lumber prices are going to go in the Fall, it’s really a function of, A, what’s going to happen on the supply side. And I think we’re going to continue to see puts and takes there with the additions in the South, the capacity coming out of British Columbia, that dynamic, I think is going to continue to play out.
And then it’s just really a function of what happens with homebuilding and repair and remodel. Our view is the homebuilders have done a remarkable job of managing and navigating an environment with higher mortgage rates. They seem to be pretty optimistic in the conversations that we’re having with them. So my expectation is the back half of the year even with high 6% mortgage rates or even 7% mortgage rates is that we’re still going to see strong single-family building, which will be supportive. And then it’s the question of R&R. And we’ve seen pretty strong demand out of that segment just as a data point. Year-over-year, our second quarter into the home improvement warehouse market was actually up. So we continue to expect that to be a strong market.
And as the treaters come back in, in the Fall. I would expect that we’re going to see reasonably strong lumber prices. And then again, it will just depend on are there upside surprises on building? Or are there supply shocks that can cause that price ceiling to go up.
Susan Maklari: Yes, okay. I appreciate all the thoughts, Devin. Thank you. And good luck with everything.
Devin Stockfish: All right, thank you.
Operator: Thank you. Our next question comes from Mark Weintraub with Seaport Research Partners. Please proceed with your question.
Mark Weintraub: Thank you. Thanks for all the details on lumber and walking us through your thought process on how pricing might evolve. If we think about OSB, I guess the first question I have is you give on that slide that I think the current prices were like $70 higher as of July 1, the way you look at it. But I think you also referenced that you’ve got — your order files are, what, three or four weeks, I believe. And so if we were to kind of assess real-time pricing in OSB, what does that mean? Can you give us a sense as to what you’d expect your prices to be given what you already know three to four weeks out once the real-time prices are what you would be calling your current prices?
Devin Stockfish: Yes. I mean without specifically giving the number, what I can tell you is directionally, our order files are actually five to six weeks out. So they’re fairly extended. As you noted, Mark, what that means for us is that there is a lag to the current pricing. And so while what you see quarter-to-date in the earnings package is lower than current, that will catch up over time. So there will be a several week lag on the upside and the flip side of that is there’s also a several weeks lag on the downside. So we ultimately get it. It’s just a timing question. And for us, as we think about the quarter, there’s a fair amount of leverage there, it’s $8 million of EBITDA per quarter for every $10 increase. So there’s a fairly significant upside. And I think just given the length of the order files, that’s going to translate into a pretty strong quarter for OSB for us.
